Filling a Gap in College Studies

Labor and Craft Management

What is the most important class not taught in college? Or, to put it another way, what is the most important skill a construction professional should have? Answer: Managing construction’s craft labor. The labor component of any construction project is the largest opportunity to increase speed, lower cost, and improve quality and safety.

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It is the line item on any job-cost or profit-and-loss statement. It determines if you will meet, beat or fail to attain your goals. But the subject of managing craft labor is not taught as a focused course in most college construction programs.

Without a course geared toward this area of management, how will students learn this critical skill that is needed to be effective in construction?

Since fewer qualified craftspeople are available than in the past, managing the existing pool more efficiently makes sense. But managing labor is a particularly sensitive, complicated subject in our industry. At my firm, we feel more discussion is needed and that, once it starts, improved education and practices will follow.

Some may say this subject is already taught in universities’ business departments and at liberal-arts colleges. Parts of it are taught, if we include the disciplines of psychology, social science, organizational behavior, management science and so on. These are beneficial courses, but more is needed. While some college programs may offer a “managing labor” class, we know from our conversations and research in the industry that most universities don’t offer a specific course in managing construction labor.

Construction labor management is different from other kinds of management just as the construction business is different from other types of businesses.

I recently had a conversation with a younger construction professional, a college graduate. He took issue with my view that construction is not an industry based on having a college education. We talked about the qualified craft hour being the most valuable unit in the business. His view was that labor is bought on a piece-rate or subcontract basis. He also said that profitable contracting was based more on negotiation skills and a sales process than on craft understanding.

We agreed to disagree. I say that craft understanding translates into knowledge of constructibility; in turn, high constructibility saves time and cost and improves quality and safety.

The Link to Profits

From a business perspective, it is important to know that your company can make a profit the first year by subcontracting all the work, but there is an upper limit to the profit percentages in the long term. General-contractor margins are limited for many reasons, including competition. More labor-intensive contractors, who self-perform parts of a project, and subcontractors may lose money the first year in business. However, in the long term, as these firms grow strong labor-management expertise and craft skills, their managers can affect the cost side of the equation. Thus, their net-profit percentage can hit double digits. It makes for a more profitable business.

The earlier a company starts learning the complicated algorithm needed to determine the final price in a labor-intensive environment, the better. I also suggest that schools assign construction professors or experienced professionals to teach the science and art of managing construction labor. Further, the instructors should be able to speak about jobsite realities.

What should be taught in the course? Start with the workers, their backgrounds and generational profiles. Then, the subject of motivation could be examined—craftspeople aren’t looking to climb the corporate ladder; they work to provide for loved ones. Next, any course should involve the dominance, inspirationalism, steadiness and consistency assessment and information about these four types of managers. My firm’s research suggests managers in construction shouldn’t be coaches to everybody but may need to be all four types of managers. Finally, the class should include the process of forecasting labor needs and availability, a very valuable skill. With these areas as a basis, a labor-management course could be the most important class a construction student ever takes.

Matt Stevens (mstevens@stevensci.com) has been a management adviser to contractors since 1994 and heads Stevens Construction Institute Inc. His “The Practical Construction MBA” (2010) is a comprehensive construction primer, from which this viewpoint has been condensed.

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